Lethbridge Real Estate News

LETHBRIDGE
REAL ESTATE PREDICTIONS
FOR 2011

MARCH 9, 2011:

This
is perhaps the most difficult year
yet for making predictions about where Lethbridge real estate will
be heading. As I write, Libya and other middle eastern countries are
in a state of unrest. The concern of course is the price of oil and
the uncertainty that will cause in world financial markets.

For Alberta, high oil prices are
usually a driver of our economy and a positive for the real estate
industry. However, if the price goes too high, then a world wide
recession can, and usually does follow, taking the real estate
market down with it.

The other unknown quantity is
Canadian interest rates and how high they may go. I have read a
multitude of predictions recently, including one which claims real
estate prices could fall sharply once rates start to rise. I
consider that to be wildly speculative and highly unlikely to
happen. However, there is no doubt that steep interest rate rises
would make it harder for people to finance and pay down mortgages,
thereby reducing demand in the real estate market. Countering that,
a recent poll suggests that 30% of Albertans are planning to buy a
home in the next two years.

$100 barrel oil
here to stay?

My best guess is that $100 a barrel
oil (or close to it) is here to stay. I believe this will revitalise
the oil patch and be a positive for Alberta. Interest rates will
rise, but only by very small amounts (because the economy is still
uncertain), meaning the negative effects on real estate will be
minimal.

For many years, prior to the boom, Lethbridge
real estate prices rose only 3 or 4% a year, basically in line with
inflation. The conditions for another property boom are no longer
there (easy credit, strong economy, etc.). However, conditions are
ideal for a return to a balanced market with price increases in line
with inflation.

A great time to buy

So what does that mean for buyers? In short,
it is a great time to buy, there is an excellent selection of homes
available and interest rates are still at historically low levels.
For sellers, it means more competition and a need for realistic
pricing. Whether you are a buyer or seller a professional realtor is
essential to represent your best interests and negotiate the best
possible deal on your behalf. My fees for sellers are reasonable and
negotiable and there is no fee whatsoever for buyers.